GST on high-rises will hit one million in Penang

Property News/ 6 December 2014 Leave a comment

Property prices in Seberang Perai are still within an affordable range of between RM250,000 and RM500,000 for double-storey terrace homes.

Over a million residents here will be affected if the goods and services tax (GST) is imposed on management fees for apartments and condominiums, said Penang Chief Minister Lim Guan Eng.

He said all management and maintenance fees for buildings with strata titles, including low- and low-medium cost flats, will rise by 6 per cent if the consumption tax is imposed.

Lim said there are a total 235,932 stratified units in Penang and at five people per household, this translates to more than one million people living in these units.

“This works up to almost 60 per cent of the population of Penang will be affected by this,” he said in a press conference at his office today.

He reminded Putrajaya that most people buy flats, especially low- and low-medium cost units, because they could not afford landed properties.

Lim said the group will be further penalised over those living on landed properties who need not pay such fees.

“The government should exempt GST on management fees of stratified developments,” he said, saying his administration will appeal to Putrajaya for the exemption.

Penang Real Estate and Housing Developers’ Association (Rehda) chairman Datuk Jerry Chan said the maintenance and management fees collected by management corporations of stratified properties were meant to pay for upkeep of the properties and not for profit.

He also noted that such joint-management bodies already faced difficulty in collections and arrears.

“This will only put a heavier strain on the management funds that are used mainly for maintenance of common property,” Chan said.

Late last month, several real estate related non-governmental organisations (NGOS), submitted a petition to the prime minister for management corporations of stratified developments to be exempted from GST.

Deputy Finance Minister Datuk Chua Tee Yong on Wednesday said the federal government is considering the requests.

Source: The Sun Daily

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